State budget negotiations begin Friday

CONCORD — Negotiations on the state’s next biennial budget begin Friday but warning shots were fired Wednesday as the two sides dig in to defend their positions.

The Senate last week approved a $10.7 billion budget — $300 million less than the House — that did not include Medicaid expansion under the Affordable Care Act, something the House and Gov. Maggie Hassan support.The House Ways and Means Committee Tuesday increased its revenue estimates of what the state has to spend by about $50 million, something Senate budget writers said was unrealistic.

While noting the House, Senate and Hassan share the same priorities — higher education, mental health services and economic development — said Senate President Peter Bragdon, R-Milford, the House needs to be realistic about spending and taxes.

“It’s the Senate’s hope that House members will not let their desire to increase spending get in the way of reasonable compromise that reflects our shared priorities,” Bragdon said in a statement. “It would be truly unfortunate for the citizens of our state if we were forced into a continuing resolution. This would mean retaining our current funding levels, rather than benefitting from the modest increases we both agree on, just because some members of the House are committed to raising taxes.”

The spending priorities differ very little, but the House and Senate are far apart on several key issues including Medicaid expansion and the Senate’s proposed $50 million across-the-board cut in employee compensation and benefits that will result in an estimated 700 layoffs.

Of the $50 million reduction, $20 million would have to come from state general funds.The two sides also differ on tobacco and gas tax increases. The House passed a 20-cent increase in the tobacco tax, but the Senate rejected it, as it did a House approved 12-cent increase in the gas tax over three years.The Senate wants business tax credits approved last year to go into effect July 1 as planned, but the House wants to suspend them for two years to save $13 million. The Senate included greater reductions in the Health and Human Services budget than the House and used $20 million in general fund money to help hospitals with their uncompensated care costs.

The University System of New Hampshire and the New Hampshire Community College System would receive the same funding as in the House plan, about $100 million more than they received in the current operating budget.

The Senate also included money for new charter schools and to restart the school building aid program, two things the House removed from Hassan’s proposed budget.

Both the House and Senate budgets spend about $2.8 billion over the next two years in state general fund money.

The House and Senate leaders named their negotiators for the budget talks Wednesday.

House Speaker Terie Norelli said, “As we move into the Committee of Conference phase of the budget, we are fortunate to have a great team of legislators working to ensure we restore investments in our state and communities.”

“They are all veterans of the budget process who I know will represent the Senate’s perspective and work well with their counterparts in the House,” Bragdon said.The budget conference committee holds its first meeting Friday at 10 a.m. in Room 210-211 of the Legislative Office Building.

House and Senate negotiators will also attempt to resolve differences in the two plans for the $125 million capital budget for the next two years which includes $38 million for a new women’s prison in Concord.